The Biggest Ponzi Scheme on the Planet-The U.S. Government
"American Economic Exceptionalism Explained"                     USAPonzi                                      by John W. White   Mar 29, 2013

USAPonzi Elevator Pitch with Numbers
Oct 1, 2014
As posted on www.usaponzi.com

The U.S. Government is fiscally

overspending,

By spending more cash every year since FY1969 than it has taken in as tax revenue.  As a result, our National Debt has gone up every year since FY1969 (see U.S. Government Financial Data (1969-2013).
                                                       FY2013       FY2014        FY2015
                         Cash Spending         $3.5T          $3.7T           $3.9T                                        
                                    
  Income         $2.8T          $3.0T           $3.1T
                            
Cash Deficit       $0.68T        $0.55T         $0.82T
                                
Cash Debt       $16.7T        $17.7T         $18.3T    

overcommitting,

By committing to pay social benefits to U.S. Citizens that dramatically exceed the Government's financial capability.
                                                      FY2013         FY2014         FY2015
                     Cash Spending            $3.5T            $3.7T             $3.9T 
 Cur Yr Chg in Soc Ben Com            $5.5T            $5.7T             $6.1T      
                    GAAP Spending            $9.0T            $9.4T          $10.0T
                                  Income            $2.8T            $3.0T             $3.1T
                       GAAP Deficit            $6.2T            $6.4T
             $6.9T
                             Cash Debt          $16.7T          $17.7T          $18.3T
               Unfunded Liabilities          $75.0T          $80.3T          $86.4T      
                 GAAP Obligation          $91.7T          $98.1T        $104.7T
     GAAP Spending/Income               3.2                3.1                3.3

GAAP Spending = Cash Spending + Current Year Change in Social Benefit Commitments.
GAAP Obligation = Cash Debt + Unfunded Liabilities.
GAAP basis Deficit Spending is $6.9 Trillion in FY2015 and growing exponentially.
GAAP Obligation is $98.1 Trillion and growing exponentially.
GAAP Spending is more than three times our Income.

undertaxing,

B
y only assessing enough tax revenue to nominally cover our Cash Spending when we need to collect enough tax revenue to cover our GAAP Spending to keep from increasing our GAAP Obligation.  Our GAAP Deficit in the table above shows the amount of this undertaxing.  By undertaxing U.S. Citizens and U.S. Businesses by $98.1 Trillion over the last 46 years, this makes these U.S. Citizens and U.S. Businesses appear to be $98.1 Trillion richer than they really are (see U.S. Total Assets Bubble).  By not collecting enough tax revenue to cover all of our GAAP basis Spending this causes deficit spending which stimulates our economy.  If we collected the tax revenue required to balance our GAAP basis budget it would reduce our economic activity (GDP) in FY2014 by about 45% (see U.S. "Real" GDP FY2014)  and reduce our economic activity (GDP) in FY2015 by about 47% (see U.S. "Real" GDP FY2015).

lying,

By using Cash Accounting when we should be using GAAP Accounting (see Cooking the Books!).

                                             FY2013         FY2014         FY2015
                  Cash Deficit       $0.68T           $0.55T          $0.82T
                     Cash Debt       $16.7T           $17.7T          $18.3T 
                GAAP Deficit         $6.2T             $6.4T            $6.9T
    Unfunded Liabilities       $75.0T           $80.3T          $86.4T 
         GAAP Obligation       $91.7T           $98.1T        $104.7T

GAAP Obligation = Cash Debt + Unfunded
Liabilities.

By using Cash Accounting the U.S. Government tells the U.S. citizens (and the world) about our Cash Deficit and our Cash Debt but does not disclose the amount of our GAAP Deficit, our Unfunded Liabilities, and our GAAP Obligation and therefore is dramatically understating our deficit and our financial commitments (Cash Debt vs. GAAP Obligation).  Our deficit spending is in actuality our GAAP Deficit ($6.4T in FY2014) rather than the Government reported Cash Deficit ($0.55T in FY2014).  The major problem is that the U.S. Government is promising to pay social benefits when it does not have the money and is using corrupt and fraudulent accounting in an effort to cover up this lie.           

and bankrupt!

Our Government's total financial liabilities, $205 Trillion according to Fiscal Gap Accounting, exceed our total public and private assets.  We will be forced to default on many of our current social benefit commitments and possibly even some of our debt (see "Our Government is Totally Broke").


USAPonzi is creating counterfeit money 


By undertaxing the U.S. citizens and businesses with this GAAP basis Deficit Spending, the private sector looks $98.1 Trillion richer but only because the U.S. Government has incurred a $98.1 Trillion public liability.  As a result, USAPonzi is creating counterfeit money in the amount of our GAAP Obligation that it is distributing to U.S. citizens and businesses, primarialy the wealthy, since the future taxpayers have no possibility of paying this public liability.  The future taxpayers now owe $98.1 Trillion and this GAAP Obligation was growing by $17.6 Billion a day in FY2014 but is now growing by $6.9 Trillion in FY2015 or $19.0 Billion a day.  Both the GAAP Deficit and the GAAP Obligation are increasing exponentially.


With current fiscal policy, the U.S. Government will generate an infinite GAAP Obligation (an infinite amount of debt) which will generate an infinite amount of counterfeit money and therefore Asset Prices will approach Infinity until USAPonzi implodes.


See Fixing Fiscal Policy for the actions that will be required to implement a sustainable Fiscal Policy. 


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